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Situation with illegal activities of lotteries needs a systemic solution

I often mention the illegal gambling businesses when talking about challenges for the legal gambling market in Ukraine, which are not directly related to the war. Illegal businesses pose a direct threat to legal organizers and players, and constantly undermine the gains of reform and discredit legal gambling. However, there is one quite specific area among the illegal segment of the market, which I would like to pay special attention to. We will talk about the illegal activity of lotteries and the need to stop it.

As the Chairman of the Ukrainian Gambling Council, I repeatedly tried to draw the attention of relevant state agencies and institutions to the illegal activities of lotteries. The illegal activity of lotteries in the field of organizing and conducting gambling games in Ukraine without appropriate licenses is the main reason for increased attention to them.

Therefore, recently, as the head of the Association, I sent a letter to Ruslan Stefanchuk, the Chairman of the Verkhovna Rada, as well as to Yaroslav Zheleznyak, the head of the Temporary Investigative Commission (TIC) of the Verkhovna Rada of Ukraine concerning the investigation of possible violations of Ukrainian legislation by officials of the Economic Security Bureau of Ukraine, state authorities and other state agencies that exercise powers in the field of economic security, which could lead to a decrease in revenues to the state and local budgets, regarding a number of violations systematically performed by lotteries.

In particular, the letter states the following.

1. State lottery operators do not have licenses for the relevant activity. For example, licenses of MSL LLC and Enterprise with 100 percent foreign capital Ukrainian National Lottery expired in 2014 and were not renewed. At the same time, both lottery operators still work.

2. All lottery operators work under the main KVED (Classifier of economic activities) 92.00 - organization of gambling. However, no lottery has received any license to organize and conduct gambling. You simply won't find a lottery on the website of the Commission for Regulation of Gambling and Lotteries in the "Registries and Lists" section.

3. Lottery operators conduct illegal activities with signs of gambling on their online platforms, namely bookmaker betting, slot machines and online casinos.

The last two activities directly put lotteries on the same level as other illegal businesses that still operate in the gambling market. That is, just like other illegal businesses, lotteries do not pay taxes and license fees to the budget for operating in the field of gambling, do not comply with the requirements for the protection of players and take away earnings from legal organizers of gambling games, which have paid tens of millions of hryvnias for the right to engage in relevant activities.

I hope that the letter will have feedback and we will be able to hear examples of actions aimed at inspecting the activities of lotteries regarding the absence of lottery licenses and illegal activities in the field of organizing and conducting gambling on their online platforms. It would also be very interesting to know how much tax the lotteries have paid under their main KVED 92.00 for the period of the actual existence of the legal gambling market in Ukraine, i.e. starting from 2021. The answer to the last question should very clearly demonstrate their real "added value" for the Ukrainian budget.


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